Greece recorded a further improvement in operating conditions in manufacturing in October, with output, new orders and employment all rising. However, growth weakened, while geopolitical turmoil and rising energy costs added to pressure on businesses.
In particular, the seasonally adjusted PMI from S&P Global fell to 53.3 points in October, from 54 in September. It nevertheless remained above the 50-point mark, signalling an improvement in operating conditions for the 45th consecutive month. The rate of growth was, however, the weakest since May.
Output rose at the fastest pace since July, while new orders increased at their weakest pace since May. The picture was also positive for exports, with new orders from abroad rising for a fourth consecutive month and at a strong pace.
Meanwhile, employment increased for the 23rd consecutive month, although at its slowest pace since April. The increase in staffing helped boost production capacity and reduce backlogs for a second consecutive month.
Manufacturers continued to face significant challenges because of the conflict in the Middle East. Suppliers’ stock shortages and delays on key shipping routes kept supply chains under pressure, with delivery times deteriorating markedly.
At the same time, higher spending on energy, fuel and transport pushed input costs to their highest level since May. Businesses passed some of the higher costs on through selling prices, with the rate of increase accelerating to a four-month high.
Against this backdrop, business confidence remained in positive territory but fell to a five-month low. Geopolitical uncertainty and concerns about the possible spread of recent protests in Europe and Greece weighed on expectations.
As Paul Smith, director of economic research at S&P Global Market Intelligence, commented, “Greek manufacturing showed resilience, with output, input purchases and employment increasing. However, uncertainty in the global economy, supply chain disruptions and mounting inflationary pressures curbed business optimism”.